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Study on ‘Do EU Fiscal Rules Support or Hinder Counter-Cyclical Fiscal Policy?

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Publication date
15 January 2021

Description

Our research was published in the Journal of International Money and Finance. It investigates the notorious tendency to run pro instead of counter-cyclical fiscal policies.  It concludes that (i) uncertainty about the cycle in real time is not the main reason for running pro-cyclical fiscal policies; interventions remain ill-timed when observable and politically meaningful indicators of the cycle are used; (ii) EU fiscal rules help law makers mitigate the risk of running pro-cyclical fiscal policy; (iii) fiscal policies tend to stabilise output during major crisis episodes.

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8 FEBRUARY 2021
Study on ‘Do EU Fiscal Rules Support or Hinder Counter-Cyclical Fiscal Policy?
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